SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

               ___X__QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended JUNE 30, 2000
                                                 -------------

                _____TRANSITION REPORT PURSUANT TO SECTION 13 OR

                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to

                         Commission file number 1-14762

                            THE SERVICEMASTER COMPANY

             (Exact name of registrant as specified in its charter)

Delaware                                           36-3858106
(State or other jurisdiction of          (IRS EmployerIdentification No.)
 incorporation or organization)

One ServiceMaster Way, Downers Grove, Illinois                 60515-1700
(Address of principal executive offices)                       (Zip Code)

                                  630-271-1300

              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No .

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
shares: 302,551,000 shares of common stock on August 10, 2000.

This document consists of 15 pages, including the cover page.



                                       1
<PAGE>

                                  TABLE OF CONTENTS

                                                                            Page

                                                                             NO.

THE SERVICEMASTER COMPANY (Registrant) -


PART I.  FINANCIAL INFORMATION

Consolidated Statements of Income for the three and
 six months ended June 30, 2000 and June 30, 1999                            2

Consolidated Statements of Financial Position
 as of June 30, 2000 and December 31, 1999                                   3

Consolidated Statements of Cash Flows for the six months
 ended June 30, 2000 and June 30, 1999                                       4

Notes to Consolidated Financial Statements                                   5

Management Discussion and Analysis of Financial Position
 and Results of Operations                                                   8


PART II.  OTHER INFORMATION

Item 1:  Legal Proceedings                                                  14

Item 4:  Submission of Matters to a Vote of Security Holders                15

Signature                                                                   16


                                       2
<PAGE>







                          PART I. FINANCIAL INFORMATION

                            THE SERVICEMASTER COMPANY

                        CONSOLIDATED STATEMENTS OF INCOME

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                            Three Months Ended            Six Months Ended
                                                  June 30,                    June 30,
                                          2000            1999           2000            1999
                                    --------------  --------------    -----------  -------------
<S>                                   <C>            <C>            <C>            <C>
OPERATING Revenue..................   $ 1,626,359    $ 1,537,074    $ 2,972,864    $ 2,652,136


OPERATING COSTS AND EXPENSES:
Cost of services rendered
 and products sold.................     1,231,518      1,168,837      2,316,934      2,068,652
Selling and administrative expenses       249,435        226,098        418,631        362,717
Other, net (1) ....................          --           85,500           --           85,500
                                      -----------    -----------    -----------    -----------
Total operating costs and expenses      1,480,953      1,480,435      2,735,565      2,516,869
                                      -----------    -----------    -----------    -----------

OPERATING INCOME...................       145,406         56,639        237,299        135,267


NON-OPERATING EXPENSE (INCOME):

Interest expense...................        35,680         28,890         67,545         50,838
Interest and investment income ....        (6,756)        (5,649)       (10,649)        (9,270)
Minority interest income ..........        (3,422)          --           (6,362)          --
                                      -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAXES ........       119,904         33,398        186,765         93,699
Provision for income taxes ........        50,533         15,363         78,383         40,055
                                      -----------    -----------    -----------    -----------

NET INCOME ........................   $    69,371    $    18,035    $   108,382    $    53,644
                                      ===========    ===========    ===========    ===========

PER SHARE

   Basic (1) (2) ..................   $       .23    $       .06    $       .36    $       .18
                                      ===========    ===========    ===========    ===========
   Diluted (1) (2) ................   $       .22    $       .06    $       .35    $       .17
                                      ===========    ===========    ===========    ===========

 DIVIDENDS PER SHARE ..............   $       .09    $       .09    $       .18    $       .18
                                      ===========    ===========    ===========    ===========
</TABLE>


(1) In the second quarter of 1999, the Company realized an after-tax gain of $30
million ($50.1 million pretax)  relating to the sales of its Premier  automotive
business  and  its  remaining  15  percent  interest  in  ServiceMaster   Energy
Management,  and  recorded a one-time  after-tax  charge of $81 million  ($135.6
million pretax) relating to its Diversified Health Services business.  Excluding
the impact of these items, net income and earnings per share were as follows:
<TABLE>
<CAPTION>

                                                Three Months Ended         Six Months Ended
                                                      June 30,                   June 30,

                                                 2000         1999          2000          1999
                                             ------------  ----------  -----------   ------------

<S>                                          <C>           <C>         <C>           <C>
Net income before non-recurring items, net   $   69,371    $  69,335   $   108,382   $   104,944
Per share before non-recurring items, net:
   Basic .................................         $.23         $.22          $.36          $.34
                                             ==========   ==========   ===========   ===========
   Diluted ...............................         $.22         $.22          $.35          $.34
                                             ==========   ==========   ===========   ===========
</TABLE>

(2) Basic earnings per share are calculated  based on 304,391 shares and 310,431
shares for the three  months  ended  June 30,  2000 and 1999,  respectively  and
305,030  shares and  305,047  shares for the six months  ended June 30, 2000 and
1999,  respectively.  Diluted earnings per share are calculated based on 308,475
shares and  318,179  shares for the three  months  ended June 30, 2000 and 1999,
respectively and 309,307 shares and 313,099 shares for the six months ended June
30, 2000 and 1999, respectively.

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                       3
<PAGE>




                                       THE SERVICEMASTER COMPANY
                             CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                            (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                  As of
                                                                          June 30,        December 31,
                                                                            2000              1999
                                                                       ------------     -------------
ASSETS

<S>                                                                   <C>             <C>
CURRENT ASSETS:
Cash and cash equivalents............................................ $      47,477   $       59,834
Marketable securities................................................        54,096           54,376
Receivables, less allowances of $40,233
   and $39,011, respectively.........................................       636,745          558,842
Inventories..........................................................        98,981           82,861
Prepaid expenses and other assets....................................       262,190          203,325
                                                                       ------------    -------------
    Total current assets.............................................     1,099,489          959,238
                                                                       ------------    -------------

PROPERTY AND EQUIPMENT:

   At cost...........................................................       678,864          659,810
   Less:  accumulated depreciation...................................       357,795          341,712
                                                                       ------------    -------------
    Net property and equipment.......................................       321,069          318,098
                                                                       ------------    -------------

INTANGIBLE ASSETS, PRIMARILY TRADE NAMES AND GOODWILL,
   net of accumulated amortization of $380,030
   and $343,316, respectively........................................     2,558,632        2,461,389
NOTES RECEIVABLE, LONG-TERM SECURITIES, AND OTHER ASSETS.............       169,344          131,490
                                                                       ------------    -------------

    Total assets.....................................................$    4,148,534   $    3,870,215
                                                                       ============    =============


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable.....................................................$      146,652   $      145,237
Income taxes payable.................................................        73,971            6,479
Accrued liabilities..................................................       340,682          364,851
Deferred revenues....................................................       297,884          257,521
Current portion of long-term obligations.............................        70,469           71,716
                                                                       ------------    -------------
    Total current liabilities........................................       929,658          845,804
                                                                       ------------    -------------

LONG-TERM DEBT.......................................................     1,852,419        1,697,582
OTHER LONG-TERM OBLIGATIONS..........................................       117,978          121,113

SHAREHOLDERS' EQUITY:

Common stock $0.01 par value, authorized 1 billion shares; issued
    and outstanding 305,652 and 307,530 shares, respectively.........         3,057            3,075
Additional paid-in capital...........................................     1,041,790        1,033,568
Retained earnings....................................................       294,866          241,701
Accumulated other comprehensive income...............................         8,556           (1,821)
Restricted stock.....................................................        (2,203)          (2,577)
Treasury stock.......................................................       (97,587)         (68,230)
                                                                       ------------    -------------
    Total shareholders' equity.......................................     1,248,479       1,205,716
                                                                       ------------    ------------
    Total liabilities and shareholders' equity.......................$    4,148,534   $   3,870,215
                                                                       ============    ============
</TABLE>

                            SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                       4
<PAGE>




                                       THE SERVICEMASTER COMPANY
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                 Six Months Ended
                                                                                     June 30,
                                                                               2000                1999
                                                                          ------------        ------------

<S>                                                                     <C>                <C>
CASH AND CASH EQUIVALENTS AT JANUARY 1................................  $       59,834     $      66,400

CASH FLOWS FROM OPERATIONS:

NET INCOME............................................................         108,382            53,644
    Adjustments to reconcile net income
    to net cash flows from operations:
       Depreciation ..................................................          39,286            30,489
       Amortization...................................................          36,714            32,816
       Non-recurring items, net.......................................               -            85,500
       Deferred 1998 tax payment......................................               -          (78,500)
       Tax refund from 1999 payments..................................          22,000                 -
       Deferred income taxes..........................................          68,548            31,884
       Change in working capital, net of acquisitions:
         Receivables..................................................         (84,678)          (85,602)
         Inventories and other current assets.........................         (72,006)          (77,372)
         Accounts payable.............................................           1,551            16,335
         Deferred revenues............................................          28,800            27,473
         Accrued liabilities..........................................         (24,567)           (6,913)
       Other, net.....................................................          (1,256)           (1,948)
                                                                         -------------      -------------
NET CASH PROVIDED FROM OPERATIONS.....................................         122,774            27,806
                                                                         -------------      ------------

MEMO:  NET CASH PROVIDED FROM OPERATIONS EXCLUDING UNUSUAL TAX ITEMs           100,774           106,306

CASH FLOWS FROM INVESTING ACTIVITIES:

    Property additions................................................         (39,068)          (50,203)
    Sale of equipment and other assets...............................            2,937             2,861
    Business acquisitions, net of cash acquired.......................        (113,510)         (419,034)
    Proceeds from business sales and minority interests...............          17,331            68,260
    Payments to sellers of acquired businesses........................         (14,578)           (6,506)
    Notes receivable and financial investments........................         (12,765)          (16,606)
    Net purchases of investment securities............................          (4,076)           (6,577)
                                                                         -------------      ------------
NET CASH USED FOR INVESTING ACTIVITIES................................        (163,729)         (427,805)
                                                                         -------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Borrowings, net...................................................         439,485           666,639
    Payment of borrowings and other obligations.......................        (305,695)         (223,936)
    Purchase of ServiceMaster stock...................................         (55,704)          (12,354)
    Shareholders' dividends...........................................         (55,217)          (54,985)
    Proceeds from employee share plans................................           7,107            11,669
    Other.............................................................          (1,378)              500
                                                                              --------         ---------
NET CASH PROVIDED FROM FINANCING ACTIVITIES...........................          28,598           387,533
                                                                         -------------      ------------

CASH DECREASE DURING THE PERIOD.......................................         (12,357)          (12,466)
                                                                         -------------      ------------

CASH AND CASH EQUIVALENTS AT JUNE 30..................................  $       47,477     $      53,934
                                                                         =============      ============
</TABLE>



                            SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




                                       5
<PAGE>



                              THE SERVICEMASTER COMPANY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1:  The  consolidated   financial   statements  include  the  accounts  of
ServiceMaster and its significant subsidiaries, collectively referred to as "the
Company".  Intercompany  transactions  and  balances  have  been  eliminated  in
consolidation.

NOTE 2: The consolidated financial statements included herein have been prepared
by the  Company  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations.  However, the Company believes that the disclosures are adequate to
make the  information  presented  not  misleading.  It is  suggested  that these
consolidated  financial  statements  be read in  conjunction  with the financial
statements and the notes thereto  included in the Company's latest Annual Report
to Shareholders and the Annual Report to the Securities and Exchange  Commission
on Form  10-K for the year  ended  December  31,  1999.  In the  opinion  of the
Company,  all adjustments  necessary to present fairly the financial position of
The  ServiceMaster  Company as of June 30, 2000 and December  31, 1999,  and the
results of  operations  for the three month and six month periods ended June 30,
2000 and 1999,  and the cash  flows for the six months  ended June 30,  2000 and
1999 have been included.  The preparation of the financial  statements  requires
management to make certain  estimates and  assumptions  required under generally
accepted  accounting  principles  which may differ from the actual results.  The
results of operations for any interim period are not  necessarily  indicative of
the results which might be obtained for a full year.

NOTE 3: For interim accounting purposes,  certain costs directly associated with
the  generation of lawn care revenues are initially  deferred and  recognized as
expense  as the  related  revenues  are  recognized.  All such  costs  are fully
recognized within the fiscal year in which they are incurred.

NOTE 4: Basic earnings per share  includes no dilution from options,  debentures
or other financial  instruments and is computed by dividing income  available to
common  stockholders  by the  weighted  average  number of  shares  outstanding.
Diluted  earnings  per share  reflects  the  potential  dilution of  convertible
securities and options to purchase common stock.  The following chart reconciles
both  the  numerator  and  the  denominator  of the  basic  earnings  per  share
computation to the numerator and  denominator of the diluted  earnings per share
computation.

<TABLE>
<CAPTION>

                                                 Three Months                      Three Months
                                               Ended June 30, 2000                Ended June 30, 1999
                                         -------------------------------    ------------------------------

(IN THOUSANDS, EXCEPT PER SHARE DATA)      INCOME      SHARES      EPS        INCOME      SHARES     EPS
                                           ------      ------      ---        ------      ------     ---
<S>                                       <C>         <C>         <C>       <C>          <C>        <C>
Basic earnings per share                  $69,371     304,391     $0.23     $ 18,035     310,431    $0.06
                                                                 ======                            ======
Effect of dilutive securities - options         -       4,084                      -       7,748
                                        ---------- ----------              ----------   ---------
Diluted earnings per share                $ 69,371    308,475     $0.22     $18,035      318,179    $0.06
                                        ==========  ==========   ======    ==========   =========  ======

</TABLE>


                                       6
<PAGE>

<TABLE>
<CAPTION>



                                                        Six Months                        Six Months
                                                    Ended June 30, 2000              Ended June 30, 1999
                                              -------------------------------    ------------------------------


(IN THOUSANDS, EXCEPT PER SHARE DATA)           INCOME      SHARES      EPS        INCOME      SHARES     EPS
                                                ------      ------      ---        ------      ------     ---
<S>                                          <C>           <C>        <C>        <C>          <C>       <C>
Basic earnings per share                     $ 108,382     305,030    $0.36      $ 53,644     305,047   $0.18
                                                                     ======                            ======
Effect of dilutive securities -options               -       4,277                      -       8,052
                                            ----------  ----------              ----------  ---------
Diluted earnings per share                   $ 108,382     309,307    $0.35      $ 53,644     313,099   $0.17
                                            ==========  ==========   ======     ==========  =========  ======

</TABLE>


NOTE 5: In the Consolidated  Statements of Cash Flows, the caption Cash and Cash
Equivalents includes investments in short-term,  highly-liquid securities having
a maturity of three  months or less.  Supplemental  information  relating to the
Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and
1999 is presented in the following  table. The increase in interest paid in 2000
is primarily due to higher levels of debt  outstanding  reflecting  acquisitions
and the timing of payments.  The change in tax payments relates to the fact that
in 2000 the  Company  received  an  income  tax  refund  relating  to 1999  over
payments.  Last year the company made the entire federal tax payment  related to
the 1998 federal tax obligation.

                                                   (IN THOUSANDS)
                                                 2000         1999
                                               -------      --------
CASH PAID OR (RECEIVED FOR):
----------------------------
Interest expense..........................  $   61,154      $   44,850
Interest and dividend income..............  $   (5,177)     $   (4,148)
Income taxes..............................  $  (10,200)     $   85,829


NOTE 6: Total  comprehensive  income was $72.1 million and $17.9 million for the
three months ended June 30, 2000 and 1999, respectively,  and $118.8 million and
$49.5  million for the six months  ended June 30,  2000 and 1999,  respectively.
Total comprehensive income includes primarily net income,  changes in unrealized
gains on marketable securities and translation balances.

NOTE  7:  The  business  of the  Company  is  primarily  conducted  through  the
ServiceMaster  Consumer and  Commercial  Services and  ServiceMaster  Management
Services  operating units. The Consumer and Commercial  Services unit provides a
variety of specialty  services to  residential  and  commercial  customers.  The
Management Services unit provides a variety of supportive management services to
health  care,   education,   and  commercial   accounts.   The  Company  derives
substantially  all of its revenues from customers in the United States with less
than five percent generated in foreign markets.

The Other Operations group includes primarily ServiceMaster Employer Services, a
professional  employer  organization  that provides clients with  administrative
processing of payroll,  insurance,  and other  employee  benefit  programs,  and
Diversified  Health  Services which  provides  services and products to the long
term care industry, the Company's headquarters operation, and certain businesses
the Company sold in the second  quarter of 1999.  Segment  information as of and
for the three months and six months ended June 30, 2000 and 1999 are as follows:


                                       7
<PAGE>
<TABLE>
<CAPTION>


                                                          THREE MONTHS
                                                         ENDED JUNE 30,

----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)

                                                        CONSUMER &
                                                        COMMERCIAL           MANAGEMENT             OTHER
                      2000                               SERVICES             SERVICES           OPERATIONS        CONSOLIDATED
--------------------------------------------------    -----------------    -----------------    --------------     ---------------
<S>                                                    <C>                  <C>                  <C>                <C>
Revenue                                                $  1,049,932         $   472,363          $  104,064         $ 1,626,359
Operating Income                                       $    134,692         $    20,940          $  (10,226)        $   145,406
Total Assets                                           $  3,603,753         $   237,478          $  307,303         $ 4,148,534

                      1999

--------------------------------------------------
Revenue                                                $    911,129         $   468,173          $  157,772         $ 1,537,074
Operating Income                                       $    134,946         $    18,527          $  (96,834)        $    56,639
Operating Income Excluding Non-Recurring Items         $    134,946         $    18,527          $  (11,334)        $   142,139
Total Assets                                           $  3,303,016         $   216,116          $  290,047         $ 3,809,179

</TABLE>
<TABLE>
<CAPTION>


                                                           SIX MONTHS
                                                         ENDED JUNE 30,

----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)

                                                        CONSUMER &
                                                        COMMERCIAL           MANAGEMENT             OTHER
                      2000                               SERVICES             SERVICES           OPERATIONS        CONSOLIDATED
--------------------------------------------------    -----------------    -----------------    --------------     ---------------
<S>                                                    <C>                  <C>                  <C>                <C>
Revenue                                                $  1,793,005         $   942,267          $  237,592         $ 2,972,864
Operating Income                                       $    221,659         $    37,586          $  (21,946)        $   237,299

                      1999

--------------------------------------------------
Revenue                                                $  1,372,851         $   925,798          $  353,487         $ 2,652,136
Operating Income                                       $    202,336         $    37,388          $ (104,457)        $   135,267
Operating Income Excluding Non-Recurring Items         $    202,336         $    37,388          $  (18,957)        $   220,767

</TABLE>

NOTE 8: In December 1999, the  Securities and Exchange  Commission  issued Staff
Accounting Bulletin (SAB) No. 101 "Revenue Recognition in Financial Statements,"
which  was  amended  by SAB No.  101B in June  2000.  SAB  No.101B  delayed  the
implementation  date of SAB  No.101  to the  fourth  quarter  of  2000.  The SAB
provides guidance on the recognition,  presentation and disclosure of revenue in
the financial statements. The Company is currently reviewing the requirements of
the guidance as well as the Company's  current policies in this area. The impact
of its adoption on the  consolidated  financial  statements  is currently  being
assessed.  The Company  intends to adopt the SAB in the fourth  quarter of 2000.
Such adoption may have a material impact to the Company's financial statements.

In 1998, the Financial  Accounting Standards Board issued Statement of Financial
Accounting Standards No.133,  "Accounting for Derivative Instruments and Hedging
Activities."  This  Statement  was  subsequently  amended to defer its effective
date. The Company intends to adopt this Statement in January 2001 as required by
the amended  Statement.  Adoption of this  Statement  is not  expected to have a
material impact on the Company's financial statements.




                                       8
<PAGE>









                              THE SERVICEMASTER COMPANY
                         MANAGEMENT DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

SECOND QUARTER 2000 COMPARED TO SECOND QUARTER 1999

Revenues  increased six percent over the second quarter of 1999 to $1.6 billion,
primarily  reflecting  acquisitions.  Operating income before the  non-recurring
unusual  items  recorded  in the prior  year  increased  two  percent  to $145.4
million, while margins decreased to 8.9 percent from 9.2 percent. The decline in
margins  primarily  reflects costs relating to the  WeServeHomes.com  initiative
that reduced operating income growth by three percent and accounted for about 20
basis points of the decrease in margins.  These cost have been  allocated to the
Company's  partner,  Kleiner  Perkins,  and are  reflected as minority  interest
income below the operating income line.

Second  quarter net income of $69.4  million and diluted  earnings  per share of
$.22 were consistent with the 1999 results before  non-recurring  unusual items.
Despite  solid  growth  in our  established  businesses  and the  impact  of the
acquisition  of  American  Residential  Services  in April last  year,  reported
profits were below  management's  expectations  due to a longer than anticipated
integration of the landscape  initiative and lower than planned sales and higher
fuel and other operating costs in the lawn care  operations.  In the second half
of the year,  the Company  expects to continue  to  experience  some of the same
factors that affected  performance in the second quarter, and earnings per share
for the year are  anticipated  to be in line with the $.72  reported  last year.
Cash income  (defined by the  Company as net income  with  amortization  expense
added  back)  increased  seven  percent to $.29 per share  compared to $.27 last
year.

 During the second quarter of 1999 the Company realized an after-tax gain of $30
million  relating  to the sale of certain  non-core  businesses  and the Company
recorded a one-time  after-tax charge of $81 million relating to its Diversified
Health Services business. These items reduced net income from ongoing operations
by $51 million ($85.5 million pretax) and, as a result, the Company reported net
income of $18 million,  with  diluted  earnings per share of $.06 for the second
quarter of 1999.

The Consumer and  Commercial  Services  business unit  reported  revenue of $1.0
billion,  an increase of 15 percent,  reflecting the inclusion of one additional
month of  revenue  from the  American  Residential  Services  (ARS)  acquisition
completed  in  April  last  year,  and  smaller  roll-up  acquisitions.  Segment
operating  income of $134.7 million was  consistent  with last year as growth in
the  established  businesses and the inclusion of ARS for the full quarter,  was
offset by a decline in profits at  TruGreen  LandCare.  TruGreen  ChemLawn,  the
Company's lawn care operations, reported a modest increase in revenue reflecting
increased commercial sales, growth in add-on services to residential  customers,
and price increases  partially offset by the acceleration of production into the
first quarter.  Operating income declined slightly for the quarter due to higher
operating and fuel costs. TruGreen LandCare,  the commercial landscape business,
reported a strong  double-digit  increase  in  revenue  reflecting  both  strong
internal  growth  and   acquisitions.   Operating  income,   however,   declined
significantly  due to the slower than  anticipated  integration of the landscape
platform  initiative  and higher  labor and other  costs.  Although  significant
progress has been made  installing  new financial


                                       9
<PAGE>



and management systems, the process of bringing over 100 separate business units
into one  company  has taken  longer  than  anticipated.  This unit  experienced
operational  issues in five of the fifteen  regions it serves and has  addressed
these issues by strengthening  the management  infrastructure  in these regions.
Terminix achieved strong single-digit revenue growth and a double-digit increase
in profit,  demonstrating  the ongoing  success in the termite  baiting  system,
productivity  improvements,  and strong overhead controls.  American Home Shield
reported  double-digit  revenue and profit growth,  with strong growth in higher
margin warranty contract renewals.  The combined American  Residential  Services
(ARS)/Rescue  Rooter operations  achieved  excellent growth in both revenues and
profits,  resulting from strong  internal  growth and the full quarter impact of
the  acquisition of ARS completed at the end of April 1999.  The  integration of
ARS has continued in line with  expectations and management has made significant
progress in turning around  operations  that were identified as problem areas at
the time of acquisition. The franchise operations, ServiceMaster Clean and Merry
Maids, achieved solid revenue and profit increases,  reflecting strong growth in
company owned operations and productivity improvements.

The  Management  Services  business  unit  reported  revenues  of $472  million,
consistent  with last year,  and a 13 percent  increase in  operating  income to
$20.9 million.  The growth in operating income included a non-recurring  benefit
from the resolution of a foreign license agreement totaling $6 million.

During the quarter, the Company continued to focus on reducing non-core business
functions  and sold its  pharmacy  management  services,  a unit of  Diversified
Health Services.

During June,  WeServeHomes.com  entered the Austin and Houston markets after the
regional  first  quarter roll out in Dallas.  An  additional  three  markets are
expected to be launched in the later half of the year. The Company has recruited
strong operating, marketing, and technical employees to support this initiative.

Cost of  services  rendered  and  products  sold  increased  five  percent,  due
primarily  to  general  business  growth  and  acquisitions.  Cost  of  services
decreased as a  percentage  of revenue to 75.7 percent in 2000 from 76.0 percent
in 1999. The landscaping,  heating,  ventilation and air conditioning (HVAC) and
plumbing  initiatives  have  affected  this  comparison  because  their  cost of
services  as a  percentage  of  revenue  is  higher  than  the  average  for the
enterprise.  Excluding these initiatives, cost of services rendered and products
sold  decreased as a percentage  of revenue to 73.6 percent from 74.9 percent in
1999.  This  decrease  primarily  reflects  the  changing mix of the business as
TruGreen  ChemLawn and Terminix  continue to increase in size in relationship to
the  overall  business  of the  Company.  The  TruGreen  ChemLawn  and  Terminix
businesses  generally operate at higher gross margin levels than the rest of the
business, but also incur somewhat higher selling and administrative  expenses as
a percentage of revenues.

Selling and administrative expenses increased 10 percent due to general business
growth  and  acquisitions,  and  increased  as a  percentage  of revenue to 15.3
percent in 2000 from 14.7 percent in 1999. The  investments in  WeServeHomes.com
increased this cost line which was partially offset by the platform initiatives.
The platform  initiatives  have lower selling and  administrative  expenses as a
percent of revenue.


                                       10
<PAGE>


Interest expense increased from the prior year,  primarily due to increased debt
levels  associated with acquisitions and share  repurchases.  The tax provision,
before  non-recurring  items,  reflects a higher  effective tax rate compared to
last year, primarily due to the  non-deductibility of goodwill from acquisitions
completed in 1999.


SIX MONTHS ENDED JUNE 30, 2000 AS COMPARED TO JUNE 30, 1999
-----------------------------------------------------------

Revenues for the six months increased 12 percent over 1999 to over $2.9 billion,
primarily  reflecting  the impact of  acquisitions  and,  to a extent,  internal
growth. The revenue growth in the six months is stronger than the second quarter
due to the timing of  production  at TruGreen  ChemLawn as well as the impact of
the new platform  initiatives  (the LandCare  acquisition was completed in March
last  year and the ARS  acquisition  closed at the end of April  last  year) and
stronger internal growth in the first quarter.  Operating income increased seven
percent to $237.3  million,  while  margins  decreased to 8.0 percent of revenue
from 8.3 percent in 1999, excluding the prior year non-recurring  unusual items.
Operating  margins  decreased  primarily  due to lower  margins in the  TruGreen
LandCare   landscape   operations   and  the   expenses   associated   with  the
WeServeHomes.com  initiative.  Net income and diluted earnings per share, before
non-recurring  items,  both increased three percent for the six months to $108.4
million and $.35,  respectively.  As  discussed  in the three month  comparison,
during the second quarter of 1999 the Company recorded a net charge that reduced
net income from ongoing  operations by $51 million ($85.5 million pretax).  As a
result of this net charge,  for the six months last year,  the Company  reported
net income of $53.6 million and diluted earnings per share of $.17.

The  Consumer  and  Commercial  Services  business  unit  achieved  a 31 percent
increase in revenue to $1.8 billion and operating  income of $221.7 million,  10
percent higher than last year. The segment's  revenue growth includes the impact
of the LandCare USA and American  Residential Services operations for the entire
six  months.   TruGreen  ChemLawn  reported  good  revenue  and  profit  growth,
reflecting the benefits of price increases and acquisitions  partially offset by
other  volume  challenges.  Customer  counts were at the same level as last year
which  was an  improvement  over the  first  quarter  comparison.  Margins  were
affected  by  increased  operating  and fuel  costs  experienced  in the  second
quarter.  The Company  expects to experience  the higher labor and fuel costs in
the second half of the year.  TruGreen  LandCare reported  double-digit  revenue
growth from both internal sources and acquisitions,  with a significant  decline
in  operating  income  reflecting  longer than  anticipated  integration  of the
LandCare  businesses and higher labor and other operating costs. The Company has
addressed   certain   operating   issues   by   strengthening   the   management
infrastructure  in troubled  regions.  In  addition,  the  Company is  investing
resources to integrate and align the landscaping and lawn care services in order
to utilize the management strength of each service line to complement the other.
Terminix  achieved solid revenue  growth and a double-digit  increase in profit,
reflecting solid increases in new termite  contracts,  strong growth in contract
renewals  and   productivity   improvements.   American  Home  Shield   reported
double-digit  growth in both revenues and profits,  reflecting  strong growth in
higher  margin  customer  renewals  and  direct-to-consumer  sales.  The Company
anticipates continuing strength in contract sales but expects tighter margins in
the  second  half of the year due to  higher  service  costs  and the  timing of
certain expenses. The combined ARS/Rescue Rooter operations reported significant
increases in revenues and profits,  reflecting  double-digit  internal growth at
Rescue Rooter

                                       11
<PAGE>


and an additional four months of revenue from the ARS acquisition  (which closed
in late April last year). Management continues to make progress in improving the
financial  condition,  controls  and  employee  morale at many of the ARS branch
locations  that  were  performing  poorly at the time of  acquisition.  Progress
continues in fulfilling  the service  needs of American Home Shield  through ARS
with  strong  increases  in  completed  service   transactions.   The  franchise
operations,  ServiceMaster  Clean and Merry  Maids,  reported  strong  growth in
revenues  and  profits  due to  strong  growth  in  both  branch  and  franchise
operations and strong cost controls.

The Management  Services business unit reported revenue growth of two percent to
$942 million and operating  income of $37.6 million,  consistent with last year.
As discussed in the three month  comparison,  the segment's results include a $6
million   non-recurring  benefit  from  the  resolution  of  a  foreign  license
agreement.  The business was affected by large  terminations which resulted in a
revenue  run rate  that was two  percent  below  the 1999  year end  level.  The
decrease in profits, before non-recurring items, reflects the loss of contracts,
costs to  unwind  these  contracts  as well as  startup  costs  from a large new
contract with a for-profit  hospital chain. The Company also continues to invest
in the Site Service outsourcing initiative and is encouraged by its progress.

Cost of services rendered and products sold increased 12 percent,  due primarily
to general  business growth and  acquisitions.  Cost of services  decreased as a
percentage  of revenue to 77.9  percent in 2000 from 78.0  percent in 1999.  The
landscaping, HVAC and plumbing initiatives have affected this comparison because
their cost of services as a percentage of revenue is higher than the average for
the  enterprise.  Excluding  these  initiatives,  cost of services  rendered and
products  sold  decreased as a  percentage  of revenue to 76.4 percent from 77.8
percent in 1999.  This  decrease  primarily  reflects  the  changing  mix of the
business as TruGreen  ChemLawn and Terminix  increase in size in relationship to
the  overall  business  of the  Company.  The  TruGreen  ChemLawn  and  Terminix
businesses  generally operate at higher gross margin levels than the rest of the
business, but also incur somewhat higher selling and administrative  expenses as
a percentage of revenues.

Selling and administrative expenses increased 15 percent due to general business
growth  and  acquisitions,  and  increased  as a  percentage  of revenue to 14.1
percent in 2000 from 13.7  percent in 1999.  This  increase as a  percentage  of
revenue is primarily  attributable  to the changing  business mix of the Company
noted above.

Interest expense increased from the prior year,  primarily due to increased debt
levels  associated with acquisitions and share  repurchases.  The tax provision,
before  non-recurring  items,  reflects a higher  effective tax rate compared to
last year, primarily due to the  non-deductibility of goodwill from acquisitions
completed in 1999.


                                       12
<PAGE>


FINANCIAL POSITION

Net cash provided from operations of $123 million was significantly  higher than
the first six months of 1999. There are two unusual tax timing items in the cash
flow  statements:  (i) a $22 million tax refund realized in the first quarter of
2000  and  (ii)  the  payment  of 1998  taxes  in the  first  quarter  of  1999.
Eliminating  these items,  cash provided from operations was $101 million,  a $6
million  decrease from 1999,  reflecting  higher working capital usage. The cash
flows reflect  receivables  and payables  management  below  expectations in the
landscape  business as this unit  continues to work to realize the full benefits
of its financial  system  conversion.  Due to the  seasonality of the lawn care,
landscape and pest control operating cycles, the Company's working capital needs
are the highest during the first half of the year and have a significant  impact
on funds provided from operations. Management believes that funds generated from
operations and other existing  resources will continue to be adequate to satisfy
ongoing working capital needs of the Company.

Accounts and notes receivable increased from year-end levels, reflecting general
business growth and increased  seasonal  activity in the Consumer and Commercial
Services  segment.  Inventories  increased  over year-end  levels as a result of
normal seasonal build-ups primarily in the lawn care business.

Prepaids  and  other  assets  have  increased   from  year-end   reflecting  the
seasonality  in the lawn care business.  The lawn care operation  defers certain
marketing costs that are incurred during the first six months,  but are directly
associated  with revenues  realized in subsequent  quarters of the current year.
These  costs  are then  amortized  over the  balance  of the  current  lawn care
production  season,  as the related revenues are recognized.  Deferred  revenues
also grew significantly,  reflecting  increases in customer prepayments for lawn
care services.

Property and equipment  increased over year end due to general  business growth.
Capital  expenditures  which include recurring capital needs is below prior year
levels when the Company funded several large  technology  projects.  The Company
has no material capital commitments at this time.

Intangible   assets   increased   from  year  end,   reflecting  the  effect  of
acquisitions,   primarily  in  the  lawn  care,  landscape,   pest  control  and
HVAC/plumbing businesses.

Debt levels increased due to the seasonal nature of the Company's operating cash
flows combined with the effects of acquisitions,  property additions,  dividends
and  share  repurchases.  The  Company  is party to a number of  long-term  debt
agreements  which  require it to  maintain  compliance  with  certain  financial
covenants,  including  limitations on indebtedness,  restricted payments,  fixed
charge  coverage  ratios,  and net worth.  The Company is in compliance with the
covenants related to these debt agreements.

In April 2000,  the Company  completed a senior  unsecured debt offering of $250
million,  8.45 percent  notes priced to yield 8.505  percent due April 15, 2005.
The net proceeds were used to repay a portion of the Company's  borrowings under
its revolving bank credit facility,  thereby, reducing the Company's exposure to
short term interest rate fluctuations.


                                       13
<PAGE>

Total  shareholders'  equity was $1.2  billion at June 30, 2000 and December 31,
1999,  reflecting  earnings  growth offset by cash  dividends and treasury share
repurchases. Cash dividends paid directly to shareholders totaled $55 million or
$.18 per share for the six  months  ended June 30,  2000.  In the  quarter,  the
Company  repurchased $4 million of shares under the repurchase program announced
last  year and for the year has  repurchased  $56  million.  In July  2000,  the
Company  announced that its Board of Directors has authorized $350 million for a
share repurchase  program.  The shares will be repurchased over time in the open
market and in privately-negotiated transactions. This authorization replaces the
Company's previous authorization of $150 million announced in October 1999.

THE COMPANY  NOTES THAT  STATEMENTS  THAT LOOK  FORWARD IN TIME,  WHICH  INCLUDE
EVERYTHING OTHER THAN HISTORICAL  INFORMATION,  INVOLVE RISKS AND  UNCERTAINTIES
THAT  AFFECT THE  COMPANY'S  RESULTS OF  OPERATIONS.  FACTORS  WHICH COULD CAUSE
ACTUAL  RESULTS  TO DIFFER  MATERIALLY  FROM  THOSE  EXPRESSED  OR  IMPLIED IN A
FORWARD-LOOKING   STATEMENT  INCLUDE  THE  FOLLOWING  (AMONG  OTHERS):   WEATHER
CONDITIONS ADVERSE TO CERTAIN OF THE COMPANY'S CONSUMER AND COMMERCIAL  SERVICES
BUSINESSES;  THE ENTRY OF ADDITIONAL COMPETITORS IN ANY OF THE MARKETS SERVED BY
THE COMPANY;  LABOR  SHORTAGES;  CONSOLIDATION  OF  HOSPITALS IN THE  HEALTHCARE
MARKET; THE COST AND LENGTH OF TIME TO INTEGRATE ACQUIRED BUSINESSES; UNEXPECTED
CHANGES IN OPERATING COSTS; THE CONDITION OF THE U.S. ECONOMY; AND OTHER FACTORS
LISTED  FROM  TIME TO TIME IN THE  COMPANY'S  FILINGS  WITH THE  SECURITIES  AND
EXCHANGE COMMISSION.




                                       14
<PAGE>





                           PART II. OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS

In the ordinary  course of  conducting  its business  activities,  ServiceMaster
becomes involved in judicial and  administrative  proceedings which involve both
private parties and governmental authorities.

RAY D. MARTIN V.  SERVICEMASTER.  In June 1996, Ray D. Martin, a former salesman
employed by  ServiceMaster's  Management  Services unit,  filed a lawsuit in the
State Court of Fulton County, Georgia (Civ. Action File No. 96VS114677J),  which
as originally  filed contended that the Company had not paid him the full amount
of commission  due to him on a sale in which he was  involved.  In the course of
the pre-trial  proceedings,  the trial court entered a default  judgment against
the Company,  thereby  leaving the question of damages to be  considered  at the
trial.  In September 1999, the jury awarded the plaintiff  compensatory  damages
and fees of approximately  $1 million and punitive damages of $135 million.  The
trial court  entered  final  judgment  for the  plaintiff  in a total  amount of
$136,259,418.  In  October  1999,  the  Company  filed  a  motion  for  judgment
notwithstanding the verdict or, in the alternative,  for a new trial. On May 11,
2000, the trial court conditionally reduced compensatory damages to $461,440 and
the punitive damages award to $45 million.  On May 23, 2000, Mr. Martin accepted
the reduced  amount,  subject to his right to appeal.  On June 1, 2000 the trial
court entered a new judgment in the amount of $461,440 in  compensatory  damages
and $45 million in punitive  damages,  as well as amounts for attorney  fees and
interest.  The Company filed a notice of appeal that same day. On June 13, 2000,
Mr. Martin filed a notice of cross-appeal. ServiceMaster believes that the award
of $45 million in punitive  damages is not supported by the facts of the case or
by  applicable  state law and that the judgment will be reversed by an appellate
court.  Under  Georgia law, a judgment  accrues  interest at the rate of 12% per
annum. The Company continues to not be able to reasonably  estimate the ultimate
outcome of this case, and accordingly, minimal expense has been recorded. In the
event that the  existing  judgment is  sustained,  or the  original  judgment is
reinstated,  after all appeals  (which is not  anticipated  by the Company),  it
would be likely that the Company's  results of operations for a particular  year
may be materially adversely affected.  However,  the Company believes,  based on
advice from legal counsel,  that the ultimate  outcome of this litigation is not
expected to have a material adverse effect on the Company's  financial condition
or results of  operations.  The Company does not  anticipate a decision from the
Georgia Court of Appeals prior to April 1, 2001.


                                       15
<PAGE>


ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


(a)      The 2000 Annual Meeting of Shareholders was held on April 28, 2000.

(b)      The following persons are elected as Class of 2003 directors:


NAME                      VOTES FOR       VOTES WITHHELD    BROKER NON-VOTES
----                      ---------       --------------    ----------------
Glenda A. Hatchett       248,213,428         7,622,039           N/A
Herbert P. Hess          250,340,061         5,495,456           N/A
Michele M. Hunt          248,597,314         7,238,203           N/A
Dallen W. Peterson       249,746,669         6,088,848           N/A
David K. Wessner         250,512,449         5,323,069           N/A

No votes  were  cast for any  other  nominee  for  directors.  The Class of 2001
directors continuing in officer are Brian Griffiths,  Sidney E. Harris,  Gunther
H.  Knoedler,  James D.  McLennan  and C.  William  Pollard.  The  Class of 2002
directors continuing in office are Paul W. Berezny,  Carlos H. Cantu, Vincent C.
Nelson, Steven S Reinemund and Charles W. Stair.

A vote was taken to approve the 2000 Equity Incentive Plan as follows:

FOR                   AGAINST          ABSTAIN       BROKER NON-VOTES
---                   -------          -------       ----------------
237,493,533           15,938,033       2,403,946           N/A

A vote was  taken  to  approve  the 2001  Long-Term  Performance  Award  Plan as
follows:

FOR                   AGAINST          ABSTAIN       BROKER NON-VOTES
---                   -------          -------       ----------------
237,432,300           15,802,203       2,601,010           N/A

A vote was taken to ratify the selection of Arthur  Andersen LLP to serve as the
Company's independent auditor for 2000 as follows:

FOR                   AGAINST          ABSTAIN       BROKER NON-VOTES
---                   -------          -------       ----------------
252,381,884           1,674,257        1,779,377           N/A

No other matters were submitted to shareholders.


                                       16
<PAGE>


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date:  August 14, 2000


                          THE SERVICEMASTER COMPANY
                          (Registrant)

                          By:                    /S/STEVEN C. PRESTON
                             ----------------------------------------------
                                                     Steven C. Preston
                          Executive Vice President and Chief Financial Officer



                                       17
<PAGE>